NEW YORK ( TheStreet) -- Global Partners (NYSE: GLP) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • GLP's very impressive revenue growth greatly exceeded the industry average of 39.5%. Since the same quarter one year prior, revenues leaped by 122.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is very high at 2.42 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, GLP maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
  • GLOBAL PARTNERS LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GLOBAL PARTNERS LP reported lower earnings of $1.76 versus $2.53 in the prior year. For the next year, the market is expecting a contraction of 66.5% in earnings ($0.59 versus $1.76).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 126.8% when compared to the same quarter one year ago, falling from $3.16 million to -$0.85 million.

Global Partners LP, through its subsidiaries, engages in the wholesale and commercial distribution of refined petroleum products and natural gas, and provides ancillary services in the United States and internationally. It operates in two segments, Wholesale and Commercial. The company has a P/E ratio of 32, above the average wholesale industry P/E ratio of 29.2 and above the S&P 500 P/E ratio of 17.7. Global has a market cap of $434.8 million and is part of the services sector and wholesale industry. Shares are down 26.8% year to date as of the close of trading on Monday.

You can view the full Global Ratings Report or get investment ideas from our investment research center.
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